NRVLiving - Real Estate. Simplified.

Let's Play Armchair Economist & Determine When the Market Improves

Greenspan's been around a long time - what do you think about his comments?  Is he a cheerleader, or a crazy economist?

No right or wrong answer here, what is your crystal ball telling you the economy will do in the New River Valley in 2009? 

Here's How To Get Your Mortgage Under $1000 a Month

Looking to buy a house in Southwest Virginia?  Perhaps you've been looking at homes in Christiansburg, or in Radford, and you just don't think you can afford it.  I'd remind you that the opportunities are there for buyers right now for two reasons - (1) the inventory available, and (2) the rates that local lenders are willing to lend at.  Let's look at the numbers ...

Assuming a house is priced at $150000, and the interest rate is 5.00% (the current USDA rate), here's how your monthly payments would break down on a home in Christiansburg purchased for $150000 with NO MONEY
DOWN:

Principal & interest:       $805.24
Prop Taxes (estimate):     114.83
PMI (None with USDA):             0

Total Payment:             $920.07

Imagine - a $150000 mortgage for less than $1000 a month.  And it's important to note that this is a USDA loan, with a secure 30-year fixed rate and NO prepayment penalty.  STILL think you can't get a loan?  I promise you that it's still easier than you think.  Contact me, I'll help you search for your best option with local lenders who have money to lend.

This can work well for many buyer profiles, but what one buyer often has a job, credit and no money?  Recent college graduates.  Virginia Tech and Radford alum, let's see how we can make this work for you!

Updated 12/19 8:05am - Stan Norris of Prosperity Mortgage emailed me to take me to task a bit, and he's right.  There are a number of variables that need to be considered regarding mortgages, including whether points are paid up front, whether the Seller is paying some closing costs, what type of property it is, etc.  This isn't an endorsement of the USDA program in every case - your local lender and agent can walk through the best options with you to determine what makes sense.  And I forgot to include insurance costs, as well - that's kind of important.  According to Eric Johnsen, a good rule of thumb to determine monthly hazard insurance on a residential property is to multiply the market value x .0025, then divide that by 12.  So in the example above, ($150000 x .0025) / 12 would mean a monthly insurance cost of $31.25 ... still less than $1000.

Loan Modifications Perpetuate The Problem, and Don't Use The Benefit Of Experience

Inman News posted information last week a new plan whose focus was to streamline the loan modification process. 

I'm admittedly behind on this post, and it's been rehashed across the web.  Essentially, if (1) you're at least 90 days delinquent on a home that is your primary residence and on which you owe at least 90% of the home's value AND (2) either Fannie, Freddie or one of their participating loan companies must own the loan, then under the loan modification program you can restructure your loan to as much as 38 percent of your gross income. 

Forgoing the in-depth analysis and critique from economists and Harvard-types for a moment, I have a problem with this.  I'm struggling with the issue of personal responsibility, and Government subsidy of these loans doesn't resolve the problem.  The problem is poor decision-making on the part of consumers and lending institutions and the real estate industry.  I'm not sure modification or "streamlining" resolves the issue of personal responsibility, and on the flip side I don't know that allowing millions of loans to default and further crippling the housing and financial sector makes a lot of sense either.  I have no answer for this, but struggling with the issue.

Bloodhound writes (emphasis mine):

The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won’t be expected to sell them to pay your mortgage.

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

“This is a once-in-a-lifetime opportunity,” Schiff says. “People are going to feel like complete morons if they don’t participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn’t afford.”

The government is offering loan servicers $800 for every homeowner they get into the plan.

Schiff predicts that loan agents “will be cold-calling people trying to get them into it. Just like they encouraged people to overstate their income to get a bigger loan in the first place, now they will encourage them to understate their income to qualify for a smaller loan.”

I can see Schiff's point.  Desperate lenders will have an incentive to push people into what appears to be an even worse problem. 

As I said, I'll leave the bulk of the analysis to economists and people who have a better grasp of the larger picture.  I know that locally, Blacksburg and Christiansburg lenders haven't gone crazy with out of control loan terms.  Rates are low, borrowers are bringing money to the closing table and deals are getting done.  Mark Weddle says it's "Back To Basics" and he's right ... you can still buy and sell in today's market.

It was eery watching this video, reposted on Jim Duncan's blog, this morning.  Take the 10 minutes to watch what Peter Schiff has to say, and then tell me you didn't raise your eyebrows in surprise at how history has played out these last several months.

No ... the photo has nothing to do with the post.  I took the photo, and I liked it.  That's all.

How Obama Will Fix The Housing Issues

Wow ... I might get around to posting some thoughts on this election, one day.  I alternated between proud, worried, optimistic, hopeful, and any number of other emotions yesterday, and like so many others followed the coverage well into the early hours of Wednesday morning.  January 20, 2009, we'll be inaugurating the 44th President of the United States, President Barack Obama, and congratulations to President-elect Obama and his family.  Regardless of whether your candidate won, lost, placed or didn't even show, it was monumental for any number of reasons.

So what's an Obama administration mean to the housing market?  Well, his website lays out a plan:

Protect Homeownership and Crack Down on Mortgage Fraud - Obama and Biden will crack down on fraudulent brokers and lenders. They will also make sure homebuyers have honest and complete information about their mortgage options, and they will give a tax credit to all middle-class homeowners.

• Create a Universal Mortgage Credit: Obama and Biden will create a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.
• Ensure More Accountability in the Subprime Mortgage Industry: Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity.
• Mandate Accurate Loan Disclosure: Obama and Biden will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.
• Close Bankruptcy Loophole for Mortgage Companies: Obama and Biden will work to eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments. They believe that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.

Additionally, REALTOR Magazine did an interview with both Senator McCain and Senator Obama, and they asked "What's the most important action the federal government can take to ease the mortgage crisis and prevent a recurrence?" Senator Obama responded:

For the short term, the housing relief legislation [signed by Pres. George W. Bush July 30] authorizing the FHA to refinance the mortgages of struggling homeowners is the right approach. I’ve also called for the creation of a $10 billion foreclosure prevention fund that works in tandem with state, local, and community nonprofit efforts to help households facing foreclosure renegotiate with lenders or put their homes on the market. We also need to expand the mortgage revenue bond program to give state housing agencies $10 billion in new resources to help struggling homeowners. For the long term, the Stop Fraud Act that I introduced two years ago would create criminal penalties for mortgage professionals found guilty of fraud and increase funding for federal and state enforcement of antifraud programs. I also want to see a simplified, standardized metric for calculating the costs of a home mortgage, similar to the annual percentage rate used by banks to identify the effective interest rate a borrower ends up paying on a loan.

Possible? I don't know.  I have to think that in some respects, Congress - and a new President - don't want to get into a fight with the banking lobbyists.  And while his idea of tax credits might be a good idea, it also means government's going to be receiving less money.  So how do these "sweeping reforms" happen? 

I've no idea.  Lots of promises are made on the campaign trail, who knows whether or not a new administration can work to fix what ails us.  The popular vote seems to think that it can, so we'll see ...

Blowing Smoke? Not Hardly ...

Have you heard?  There are a few things happening in the financial sector that are probably giving you cause for concern.  Truth bet told, they've given a lot of us cause for concern ...

Just a quick note to let you know that there are home loans currently being funded, just as Mark Weddle and  Dennis Duncan said there were.  I'm not going to blow smoke and say that there a lot of companies out there that are having trouble providing credit to buyers, and the stock market is absolutely a scary place to be right now.  BUT ... the mortgage market is not mirroring Mountain Lake. 

In order to make it happen, you'll need three things:

• good credit. There are differing opinions of what "good" credit is, so let me help connect you with someone who can tell you exactly how you stack up.
• money to put down (and it DOESN'T have to be 20%).
• proof of monthly income. Gone are the days of what we called "no doc" loans (thank God).

If these items look familiar, it's because they're all things that lenders have looked for in the past, and that they'll continue to look for in the future.  The mortgage market isn't gone ... in fact, we're closing two properties THIS WEEK that were funded by a local lender just within the last two weeks.  Let me know if you'd like to review your individual situation.  It's not going to be the right time for everyone to buy, but if you can meet the three criteria above it just might be worth your while.

Blowing smoke.

The Emergency Economic Stabilization Act of 2008 - What's It Say?

The bailout bill - also called the Emergency Economic Stabilization Act of 2008 - has been passed, and I know you've been itching to get your hands on a copy. 

You can read the full report here.

But if you'd like a summary (and I'd suggest it might be a bit easier to digest) you should check out the Financial Planning Association's site.

Thanks to Eric for sending this in.

$700 Billion Isn't Monopoly Money - Yet We Print It Like It Is

I've been sitting on this post for a few days.  Last week, the Bailout Bill was all anyone could seem to talk about, and I was one of millions watching and waiting to see what the government was going to do.

And they threw me a curve.  I didn't expect them to vote it down.  I fully expected that they'd get together, vote, then slap each other on the back and head out to vacation.  They took some more time, voted for it and THEN headed out for vacation.  You can read the latest iteration here.

We shouldn't be in this mess to begin with. 

I'm hesitant to play armchair economist here, because truth be told I can't seem to comprehend the scope of a  $700 billion bill that deals with a situation that's not been seen during my lifetime.  How did we get here?  I understand the real estate portion of this mess - banks invested in bad mortgage loans, and now they don't know when they're getting their money back.  That's why it's called a bailout.

There's lots of blame to go around, and a thousand thoughts on what it all means.  (Updated 10/6 11:50am - The Wall Street Journal says Washington's to blame)  I'm certainly not qualified to know who's got it right, and who's just blowing smoke, and the cynic in me thinks that most just like to hear themselves talk.  I'm not going to stare at the heavens, drop to my knees and scream, nor am I going to post anything other than this post.  What I'm going to do is focus on what I can control - providing the absolute best service I can to my real estate clients.  It's what I have, it's what I can do best, and I'll keep moving towards Go to collect my $200.

(Updated 10/6 11:50am - Just started through my feed reader from the weekend and read this post by Jim Duncan.  I like the end ... "Figuring out how we will all be impacted - in as calm, rational and non-panicing manner - is crucial."

Photo credits

Who Knew Reading Could Be So Much Fun?

Yesterday, I had the opportunity to speak in four sessions at the NRV Association of REALTORS® annual trade show and education fair.  The topic was social networking and media, something that I've been covering regularly lately, it seems.

In the sessions, we talked specifically about the NRVLiving Real Estate Blog, as well as Twitter - two tools that I really find value in.  There are any number of social networking sites, however, with many related to real estate (and of interest to the session members yesterday), while most are NOT even remotely related.  Facebook, Myspace, LinkedIn, YouTube or Flickr might be ones you've heard of before, and there are seemingly thousands more; this blog would be considered a social media site, in fact.  

I've been writing this blog for two years this December, and I read a lot of other blogs in order to find topics I want to discuss, laugh about, etc.  On average, I'd guess I likely read five or six times more things than I ever consider writing about.  As I talked with people yesterday, I realized that there are three main benefits I've  received from writing here.  They are, in order of importance:

• Education - I've become a much better agent and student of real estate as a result of the reading I've done.
• Relationships - The relationships with clients, readers, even other agents as a result of reading and commenting on other social networking sites has been a huge benefit.  Professional relationships, personal relationships, they've all meant a lot to me.
• Impact on my business - Obviously, I need to be able to quantify my efforts, and based on the education and relationships things like this blog and Twitter have fostered, I can do that.

As I said, I read a lot.  Most are industry-focused blogs about real estate, sites like VARBuzz.com and AgentGenius.com, as well as dozens of blogs written by REALTORs® and lenders from around the country - Blown Mortgage, RealCentralVA, Real Estate Shows, and Jay Thompson all have tabs open in my browser right now, and there are another 200 unread items in my feed reader.  Most of my reading is real estate-related, but there's some golf and Hokie stuff in there, as well.

What do you like to read online?  What blogs do you check on a regular basis, or have delivered to your inbox.  Share some of them in the comments, and I'll post a follow-up post with everyone's recommendations - maybe we can all find something new and exciting to read!

Photo credits.

The Wall Street Collapse & Its' Effect On Real Estate

As I was researching on Monday night the day's collapse on Wall Street and how it might affect housing, I got a better sense of how absolutely broad the news was.  Consider:

• the world's largest insurer, AIG, must sell off $20 billion in assets and come up with another $20 billion in capital
• Lehman Brothers filed for bankruptcy, setting the dubious distinction of being the largest bankruptcy in history (more than 6x larger than 2002's WorldCom fiasco)
• Merrill-Lynch, in business since 1914, was forced to sell to Bank of America to avoid going into bankruptcy
• More than 24 stocks fell for each that rose on Monday

That's not the half of it, I'm afraid.  As I write this, headlines scrolling across all the news stations are screaming at me - "Financial meltdown grows - AIG failing", "Fed fails to reduce interest rates", "Crisis on Wall Street".  Insurance giant AIG is in talks right now with the Federal Reserve, on how best to stabilize that company with an infusion of capital somewhere on the order of $100 billion plus.  Morgan Stanley has been dealt a severe blow, Several phone calls from friends and clients called or emailed throughout the day, and everyone wants to know what it's doing to the housing market. 

Truth be told, I don't think that much happens.  Here me out on this, there's a point.

When the stock market drops, you typically see people moving money from stocks and into what are considered "safer" investments, like bonds, and specifically mortgage bonds.  A drop in the stock market is only a good thing for mortgage rates, as evidenced by the movement of rates over the last several days.  In some cases, I've seen drops among 30 year fixed rates by as much as 5/8 of a point, and today they were lower than yesterday.  I'm of the opinion that in the short-term, we'll continue to see mortgage rates low and no response from the Fed to move the interest rates.  Rates won't continue to stay low - and truth be told they've been low for much longer than we realize - and will eventually trend upwards again.  If you're a buyer right now and haven't yet found a place, I think you're likely okay for the time being.  If you're under contract and haven't locked in your rate, you might want to do it as the volatility of rates this week is really creating a crap shoot. 

The best analysis I've seen of this whole thing comes from Jeff Corbett, written on Agent Genius:

Lehman Brothers

The Government can’t bail everyone out and it looks like Lehman Bros got to be the first major brokerage to receive the pink slip.  Why?  They had the baddest of the bad assets, especially from a mortgage perspective, Lehman owned Aurora Loan Services and BNC Mortgage.  These two sub-divisions lent sub-prime mortgage money on some of the most ridiculous terms I’ve ever seen. 100% LTV on investment properties with a 640 score, no need to prove income or assets… A+ paper, for the bathroom.

In the end it was cheaper and easier to let Lehman Bros get gobbled up in Bankruptcy by Goldman Sachs and other private equity players than have the Treasury shore them up.  Someone had to be the first to get the shiv.

Merrill Lynch and BoFA

As it became evident Lehman Bros was going down, Merrill Lynch scrambled to make a deal with what ended up being cash deposit rich Bank of America (rumors had them courting Wachovia too).  Good for Merrill, bad for BoFA, who apparently didn’t learn their lesson when they acquired Countrywide (IMO).  Merrill started going sideways when they aggressively entered and became one of the top issuers of *drum roll please* the sub-prime mortgage market.  The way it’s being spun is BoFA is strong in banking and lending and wanted Merrill’s wealth management pundits…spin-spin…

AIG

The world’s largest insurer (for now) appears to be in a bit of trouble as well, although the trouble should be confined to their holding company and not affect their individual insurance company subsidiary’s ability to conduct business and pay claims.  AIG (as most insurance companies do) invest a portion of their premiums into other assets, and guess where AIG invested heavily?  *Drum roll please* the sub-prime mortgage market…

AIG is significant in all of this for a few reasons, they’re part of the DJIA and a staple of many mutual funds.  So as AIG goes, it drags the Dow and many others (down) with it.

The Common Denominators

So, crap runs down hill.  The common denominators here are how vested these companies were/are in the sub-prime mortgage market, how bad those poor performing assets really are and what other upside is there to mitigate the crap…

Lehman Bros appears to have been the worst of the bad and was subsequently voted off the island.

More analyses here:

• Dan Green, The Mortgage Reports
• Tom Vanderwell, written on Bloodhound Blog

Not to sugarcoat any of this, because it sucks for a LOT of people.  I wonder how Bank of America will do, taking on this many bad mortgages from Countrywide and now Merrill-Lynch?

Photo credit

There's No Road Map On This Trip

     What a day.  We knew on Sunday that there were bad things waiting to happen when the markets opened on Monday, but in case you've missed it (and I don't know how you could):

• the DOW dropped 504 points, the worst free fall since 2001
• Lehman Brothers, one of the top firms on Wall Street, went bankrupt
• Merrill-Lynch was forced to sell to Bank of America
• American International Group (AIG) is looking for money in order to stay afloat

Are you wondering what this all means for housing in the US?  Yea, me too - I'm still trying to wrap my head around it all myself, but stick around and I'll try to get something logical up here shortly.  There's no guide book for today's news, time will tell how we fare.  Stay tuned ...

The Fannie Mae and Freddie Mac Debacle Are Pushing Mortgage Rates ...

Down.

The government takeover of Fannie Mae and Freddie Mac made big news over the weekend. 

First, the takeover took place on a weekend.  Who knew government worked on weekends? 

Second, Wall Street has responded and mortgage rates have gone DOWN.  Why?

Because Fannie Mae and Freddie Mac are considered to be much stronger, now that they are under government control.  They were government entities before, just thinly veiled as such, but now they are considered much more stable, pushing rates down and lowering the cost to borrow.  And they fund so many of the nation's mortgages - about $6 TRILLION of the country's $12.1 trillion in outstanding mortgages - so confidence is critical.

Good news for homeowners.  Current homeowners - now would be a good time to refinance if it would save you 1/2 a point or more.  Folks looking to buy - consider locking in your rate if you'll be closing on a property within the next 60 days.  This could save thousands a year in payments.

Updated 9/10 - Dan Green has a great analysis of the situation.

Look A Little More Closely

On Saturday's NRVLiving Real Estate Show (which, coincidentally, we don't have an electronic  copy of - argh), we spent a good bit of time discussing HR 3221 - the Housing and Economic Recovery Act of 2008.  This bill was introduced in July 30 2007, tweaked and massaged and - as evidenced by its 694 pages and 237 Amendments - added to several times until it was signed into law exactly one year later by President Bush on July 30 2008.

So what it is it?  According to the House Committee on Financial Services, the bill is designed to respond to the housing crisis and prevent a repeat of problems.  A good idea, yes, but look a little closer ... when you dig into it, there are some highlights that every American should be aware of, regardless of whether you're a homeowner or not.  Some of the key points include:

• Conforming loan limits have been raised to $625000.  recently, the conforming loan lmit - those loans that would be eligible for purchase by either Freddie Mac or Fannie Mae - was capped at $417000 previously.  In high-priced areas, as loans have been harder to come by, fewer homeowners have been able to qualify for these loans ... I'm sure the hope is that this will stimulate this section of the market.
  
• The one that most folks have likely heard of is the FHA Foreclosure Rescue.  Under this section, the Federal Housing Administration will take on as much as $300 billion in new mortgages.  Lenders will be able to write down qualified mortgages to as much as 85% of the appraised value, and then the borrower can then refinance into an FHA-backed, 30-year fixed mortgage at 90% of the appraised value.  There's a catch, of course - borrowers will have to share 50% of all future appreciation with the Federal Housing Administration.
  
• The First-Time Homebuyer Tax Credit will apply to homes purchased on, or after, April 9 2008 and before July 1 2009.  If you're a first-time buyer though, don't get too excited.  It's not really a credit, but an interest-free loan for $7500 that you'll be required to pay back.  If you own the home for 15 years, you'll pay it back during that time period, at $500 per year.  If you own the home for LESS THAN 15 years, and there's enough gain at the time you sell, you'll pay the remainder back at that time.  You have to qualify, of course - single home buyers must make less than $75000, and married couples less than $150000.  When the median salary is much less than that in the New River Valley, I'd think a lot of first-time buyers would want to take advantage of this.
  
  
• This next one is important, though, and one about which I expect a lot of people are going to be surprised.  It used to be that when you sold a home, if it had been your primary place of residence for two of the last five years, any money you made on the sale of that home was yours to keep, tax free.  $100000 profit?   Yours to keep, thank you very much!  Under HR 3221, however, the Capital Gains Exclusion Rule comes into play, and hits American homeowners right in the wallet.  It works based on a formula (congrulations, elected officials, for making it SIMPLE):
  
  
  Profit from sale * (# of days home was primary residence / # of days you owned the home)


So, say you bought a Blacksburg home for $300000 on January 15 2004, you lived in it for four years, and moved out January 15 2008.  On January 15 2009, you sold it for $500000, making your capital gains $200000.  Under the old system, you'd have $200000 in your pocket, tax free.  Now, with the Capital Gains Exclusion Rule, it looks like this:

          200000 * (1460 / 1825) = $200000 * .80 = $160000

$160000 of your profit will be exempt from capital gains, but there's $40000 left over the federal - and state - government would like a piece of.  The federal capital gains rate is 15%, while the VA rate is 5.75%, so 20.75% - or $8300 - of that money you'll never see.

Good idea?  Bad idea?  According to GovTrack.us, the cost per American is $4 between 2008-2012.  It seems to me that, while things like first-time buyer credits and lender write-offs might help stabilize and boost buyer confidence in some areas, things like the Capital Gains Exclusion Rule are just going to piss people off.  And, at $8300 as in the example above, cost far more than just $4.

You can find the whole text here.  Photo credit.

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Failing to Prepare Means You Swallow A LOT Of Water

Tony Arko of LoudounStats.com wrote a post earlier this month encouraging readers to sign up for  several triathlons happening later this year in his area.  The post wasn't all about just doing a tri and having fun though - if anyone participated in one of the tris AND used Tony to buy or sell a house in 2008, he'd provide them a $1000 gift card to buy more triathlon gear. 

As someone who has done a couple of triathlons, and wants to do more, I perked up.  Of course, I was also sitting on the couch reading the post so I got up and trekked outside for a run.  I HATE running ... thanks Tony.  I cursed you every step.

A quick story

I did a tri a few years ago called The Sandman, in Virginia Beach.  The year before, I did it with some buddies and the weather forced the swim to be cancelled (because of the waves).  This particular year, when I got to Virginia Beach, the weather was similar and the waves were up - I was certain we wouldn't do the swim.  I had trained, but not as well as I should have, and mentally I had given up on that leg.  The morning of the race, I discovered we WERE in fact doing the swim - GULP.  When the race started, it took me nearly 10 MINUTES to get out to the first buoy, and I was beat.  The waves were constantly crashing over me, I had swallowed more saltwater than I cared to, and I was done.  DNF, Did Not Finish, had to be towed to shore and then do the long, shameful walk back to the starting line.  I knew it was hard to train for open ocean swims in Blacksburg, but nevertheless I had failed to prepare, and therefore prepared to fail. 

Prepare For Real Estate Success

After I finished the run the other day, hacked up my lungs and stopped weeping, I realized that once again I was failing to prepare.  I hadn't run consistently in months, and I couldn't have reasonably expected to pick back up where I left off.  Buying a house is the same way.  When you're buying a house, you've got to train for the process; you don't just wake up one morning and buy a house that afternoon.  There are a number of things you have to do to get ready.  Your financial house needs to be in order, which might mean you need to raise your credit scores, or save some additional money.  You need to shop around a bit, see what areas of Blacksburg or Christiansburg might fit your lifestyle.  You need to find a good agent - I can help you with that.  Once you've found that perfect house, it'll take more time to inspect it, work through the safety items that arise from that, and move toward closing.  And don't forget the attorney - you want an attorney, this is a whole other post - and the lender who'll provide the financing! 

Just as it's not an overnight process to find the perfect house, there's not an instant route to success in a race, either.  The satisfaction of finishing both accomplishments is unlike any other, however.  If you'd like to talk more about the steps necessary to buy a New River Valley home in today's market, let me know and we can talk.  If you'd like to know how to prepare for an open ocean swim ... I can't help with that one, but I'm still looking for the secret!

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Raise Your Credit Score 100 Points In 45 Days

Think it can't be done?   ... Alcova Mortgage says it can.

Clear as mud, right?  The credit industry seems to be a secret society - don't take each bullet point as an irrefutable fact, but it does provide a good basis of understanding of how your credit score can improve, and offers steps to take.  And let me know if you follow the steps and you see your score improve - share your success! All of this is important because with a tightening mortgage industry, your credit score is becoming an even more important asset when it comes to getting a loan.  Like any asset, protect it and grow it, and it will serve you well.

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In Health & In Wealth ... Unless We Can't Pay The Mortgage

Thanks to Darla for pointing me to this page.  Looks like another byproduct of the mortgage mess might be a rise in divorces ...

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Dynamic Subprime Mortgage Map

Discovered this subprime mortage map somewhere online last week - I wish I knew who to give credit to where credit was due, I'm sorry about that.  Nevertheless, it's an interesting tool to determine the percentage of subprime and Alt+A mortgages in your area.   It looks like it tracks, among other things:

• # of subprime loans per 1000 units
• # in foreclosure per 1000 units
• # of REOs (Real Estate Owned, aka Bank Owned properties) per 1000 units
• Median Combined Loan-To-Value

A neat little tool, play with it and see how your area stacks up.

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An Explanation - Or Not - Of The Credit Crisis

Ask three lenders to explain what's happening with credit in this country, you'll get three different answers.  Ask me, and I'll direct you to three lenders ;).  Apparently, if you ask the Wall Street folks, they don't really know, either.

From the New York Times today ...

New River Valley Home Expo

Don't forget, the 2008 Home Expo will be held this weekend at the Christiansburg Rec Center on North Franklin Street.  Admission is $4, and will offer more than 140 booths, a silent auction and more!  I know Auz-Bloc will be there, you can meet Bill and check out this amazing product while you're there!

Download home_expo.pdf

Here's a video I did earlier this winter about the thermal mass of the house at 153 Gracie Lane:

Thoughts & Musings ....

I've come across a few things that I just haven't gotten around to talking about, 'cause in between searching for the new Hokie Express and actually trying to sell a property or two this week, I've just run out of time.  So, here are a few things I thought might be of interest:

• It takes a Village.
• NVAR shuts down a Facebook group comprised of it's own members.  Go here.  Or here.  NAR making friends and influencing people.
• The front door of Blacksburg.
• The NRVLiving Real Estate Show live and in prime time tomorrow, 10am.  We'll have Beth Mann from Cabinetry By Design in studio, and Mark Weddle will stop by to make a Big HUGE announcement!  810am or 810wpin.com, call in at 866-961-1430 if you have a question you'd like to ask!

Lowest Mortgage Rates In 30 Years? We Shall See ...

I received a text message this afternoon from a reader who wrote, "Just saw on ticker that mort rates are lowest in 30 years".  Since I haven't written anything on MORTality rates on the blog (other than this odd little story), I'm assuming he meant MORTgage rates.

It's true, mortgage rates are low this week as a result in part of the market decline.  But the lowest in 30 years?  I'd be surprised if it's true, below is a recap of the annual average of 30-year fixed rate mortgages, dating back to 1977.  We'll use 5.5% as your current average since that's what Mark Weddle was quoting last week.  You can see the entire month-by-month breakdown here.  So, is the claim true?  Let's see:

• Average of 5.84% in 2004
  • 5.45% in March of that year
• Average of 5.83% in 2003
  • 5.23% in June of that year

5.23% is the lowest I can find in over 30 years, and that's happened within the last five years.  Impressive.  So is he right, are these the lowest rates we've seen in 30 years? 

Pretty darn close.

Just for "fun", the highest rate was 17.60% in February 1982.  I can't imagine.